Oklahoma City (OKC) is a hotspot for real estate investors, thanks to its affordable housing market (median home price: $215,000 as of 2023) and growing population (1.4 million in the metro area). However, many new landlords underestimate the hidden costs of rental ownership, leading to cash flow nightmares. You can contact local property management company like OKC Home Realty Services in Oklahoma city to over come the hidden cost and lower the unwanted costs while owning rental property. This guide uncovers the often-overlooked expenses of owning a rental property in OKC, backed by local data and expert insights.
Fees and Costs While Owning Rental Property in Oklahoma City
1. Property Taxes and Insurance
Property Taxes
Oklahoma County’s average property tax rate is 0.86%, slightly below the national average. For a 200,000home,thistranslatesto∗∗200,000home,thistranslatesto∗∗1,720 annually**. However, rates vary by neighborhood—historic districts like Heritage Hills may have higher assessments.
Insurance Costs
Oklahoma’s severe weather drives premiums up. Landlord insurance in OKC averages 1,200–1,200–2,500/year, nearly 20% higher than the national average. Policies often require additional wind/hail coverage, adding 500–500–1,000 annually.
2. Maintenance and Repairs
Routine Maintenance
Plan for 1–4% of the property’s value annually (2,000–2,000–8,000 for a $200,000 home). Common OKC tasks:
- HVAC servicing: 150–150–300/year (critical for extreme summers).
- Gutter cleaning: 100–100–250 (to prevent stormwater damage).
Emergency Repairs
OKC’s clay soil increases plumbing risks. Burst pipe repairs cost 500–500–1,500, while roof hail damage averages 5,000–5,000–15,000.
3. Property Management Fees
While self-managing a rental property can save money, hiring a professional property manager is often worth the cost for busy or out-of-state landlords. In OKC, management companies typically charge 8–12% of the monthly rent (e.g., 120–120–180/month for a $1,500 rental). Some firms also charge leasing fees (50–100% of one month’s rent) to place new tenants.
What’s Included?
- Tenant screening and lease drafting.
- Rent collection and financial reporting.
- 24/7 maintenance coordination.
DIY vs. Professional Management
- Time Commitment: Self-managing requires ~5–10 hours/month for tasks like tenant communication and repair coordination.
- Cost Savings: Skipping management fees could save $2,000+/year, but consider the value of your time.
4. Legal and Administrative Costs
Evictions
Oklahoma law allows landlords to file for eviction for non-payment, lease violations, or property damage. However, the process is time-consuming and costly:
- Filing Fees: 150–150–300.
- Attorney Fees: 500–500–1,000 (if contested).
- Lost Rent: 2–3 months of unpaid rent during the process.
Pro Tip: Reduce eviction risks by using thorough tenant screening tools (e.g., credit checks, rental history verification) and drafting airtight leases compliant with Oklahoma’s Residential Landlord and Tenant Act.
Licensing and Compliance
- Rental License: Required for multi-family properties in OKC ($25/year).
- Inspections: Mandatory for licensed rentals to ensure compliance with safety codes (e.g., working smoke detectors, no electrical hazards).
- Penalties: Fines for non-compliance can reach $500+/violation.
5. Capital Expenditures (CapEx)
CapEx refers to major upgrades that extend a property’s lifespan. OKC’s climate demands frequent replacements:
- Roofs: Hailstorms shorten lifespans to 10–15 years (vs. 20–30 years nationally). Replacement costs: 5,000–5,000–15,000.
- HVAC Systems: Extreme summers strain units. Plan to replace every 12–15 years (4,000–4,000–8,000).
- Flooring: Tenant turnover and weather-related wear mean replacing carpets every 5–7 years (2–2–5/sq. ft).
Budgeting Strategy
Save 200–200–400/month in a dedicated CapEx fund. For example, a 200,000propertymightrequire200,000propertymightrequire150,000 in upgrades over 30 years—breaking down to ~$415/month.
6. Utilities and HOA Fees
Landlord-Paid Utilities
While tenants typically cover electricity and gas, some OKC landlords pay for water, sewer, or trash to avoid disputes. Average monthly costs:
- Water/Sewer: 70–70–100.
- Trash: 20–20–30 (varies by waste management provider).
HOA Fees
In suburbs like Edmond, Nichols Hills, or Deer Creek, HOA fees range from 200–200–400/month, covering:
- Landscaping and communal pools.
- Security and neighborhood upkeep.
- Compliance fines (e.g., unapproved paint colors or fencing).
Watch Out: Some HOAs restrict rentals (e.g., minimum lease terms), so review covenants before purchasing.
7. Marketing and Tenant Screening
Marketing Costs
- Listing Platforms: Zillow (10–10–30/week), Apartments.com (9–9–99/month).
- Professional Photos: 100–100–200 (boosts applicant interest).
Tenant Screening
- Background Checks: 30–30–50/applicant (covers credit, criminal, and eviction history).
- Lease Signing: Digital tools like DocuSign (10–10–30/month) streamline the process.
Vacancy Tip: Start marketing 60 days before a lease ends to minimize gaps.
8. Miscellaneous Expenses
Travel Costs
Out-of-state landlords spend 500–500–1,000/year on flights, hotels, and car rentals for property visits.
Software and Tools
- Accounting: QuickBooks (30–30–80/month) tracks income/expenses.
- Rent Collection: Avail or RentRedi (5–5–15/month) automates payments.
Emergency Fund
Aim to save 3–6 months of expenses (e.g., 6,000–6,000–12,000 for a $1,500/month rental) to cover unexpected vacancies or repairs.
Conclusion
Owning a rental property in OKC can generate steady income, but profitability hinges on anticipating hidden costs. For example, a 1,500/monthrentalmightseemtoyield1,500/monthrentalmightseemtoyield18,000 annually, but after subtracting property taxes (1,720),insurance(1,720),insurance(2,500), maintenance (4,000),vacancies(4,000),vacancies(3,000), and management fees (2,160),thenetincomedropsto∗∗2,160),thenetincomedropsto∗∗5,620/year**.
Pro Tips:
- Use budgeting tools like Stessa or Excel to track expenses.
- Partner with local contractors for discounted repair rates.
- Stay updated on OKC’s rental laws via the Oklahoma City Housing Authority.